KRA Introduces Incentives For Whistleblowers To Combat Tax Malpractice

The Kenya Revenue Authority (KRA) has announced a new reward scheme for whistleblowers who expose tax malpractices.

The authority will pay 5% of the recovered tax, capped at Sh5 million per case, as part of its efforts to enhance transparency and accountability in tax collection.

“To incentivize the reporting of tax malpractices, KRA has also established a reward scheme offering informers 5 percent of the tax recovered with a maximum pay-out of Sh5 million per case,” read a statement from the authority.

This initiative is one of several robust measures the tax authority has rolled out to fight corruption within its ranks and improve revenue collection systems.

The KRA disclosed an increase in disciplinary actions against staff for misconduct. Between July and September 2024, the authority issued 84 sanctions against employees, a significant rise compared to 37 cases in the same period in 2023. The sanctions include dismissals, warnings, and other corrective measures.

Lifestyle audits have also been introduced as a tool to uncover unexplained wealth among staff. In the fiscal year 2023/2024, 41 lifestyle audits were conducted, resulting in the recovery of Sh549 million.

The authority has embraced a risk-driven compliance approach, underpinned by data analysis and risk assessments. This ensures that every action taken is supported by evidence, enhancing transparency and accountability.

“This approach informs taxpayers of the basis of KRA’s actions while ensuring proper documentation for audit trails,” the authority stated.

KRA Commissioner General Humphrey Wattanga reiterated the agency’s commitment to becoming a world-class institution with integrity at its core.

“We are committed to transforming KRA into a world-class institution with the highest standards of integrity and accountability. Through these strategic measures, including the use of technology and a firm stance on corruption, we are not only enhancing revenue collection but also building a more transparent and efficient tax administration system for the people of Kenya,” said Wattanga.

To bolster its fight against corruption, KRA is implementing the East African Revenue Authorities (EARA) Anti-Corruption Framework. This includes developing an integrity communication strategy and a whistleblower mechanism to encourage public participation in exposing wrongdoing.

Additionally, the tax authority is in the initial stages of adopting the World Customs Organization East and Southern Africa (WCO ESA) Code of Conduct on Integrity, which has already been ratified.